Silja to focus on three core routes

John Rimmer

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As the Finnish ferry company's owner Sea Containers seeks a buyer for the business, Silja is to streamline its fleet and route network

Baltic ferry operator Silja Line is to cut its fleet and axe non-profitable routes as owner Sea Containers entertains offers to buy the business. The cruise vessel Silja Opera will be sold and the company's routes between Rostock, Helsinki and St Petersburg discontinued from February. As a result of the restructure, Silja's fleet will be reduced to eight ships plying the Helsinki-Tallinn, Helsinki-Stockholm and Turku-Kapellskår-Stockholm.

Silja senior vice-president corporate communications Tuomas Nylund admitted that the company had "misjudged the markets" in Germany and Russia. "The problem with Silja Opera and the cruises between Russia and Germany was a lack of volume. Although our research showed that St Petersburg was a very attractive market, it proved difficult to turn that interest into ticket sales. Visa requirements in Russia were an important obstacle, as was the seasonality of the routes. It wasn't feasible to run the service all year round and oil prices also made the vessel very uneconomical."

Nylund said that Silja's retail business on its core routes would continue as usual. "We experienced a big fall in margins on sales between Helsinki and Tallinn after Estonia joined the EU, and the increase in volume has not compensated for that. The tough competition in the market makes it impossible to raise ticket prices. On our routes between Finland and Sweden we suffered when the Finnish government raised domestic taxes on liquor and we had to lower prices to match the high street, but most of these factors are common to all operators. Everyone on the Baltic is making a loss with the exception of Tallink, thanks to their lower crew costs. But retail on our core routes is still healthy and despite the fact that Silja is for sale, operations will continue as before on those routes."